Cable and Osborne clash over bank bonus reform - papers

Tensions over banking policy between the Chancellor and the Business Secretary sparked back into life yesterday after Cable issued a strongly worded statement in response to Osborne's hint the reforms could toned down.

Cable said in a statement: "Transparency is key to creating confidence in any commitment from our banks to behave more responsibly on pay and bonuses. Outrageous and irresponsible pay structures were a driver in our financial crisis."

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UK banks suffer fallout from across the Irish Sea

Banking shares went into a tailspin yesterday as investors took fright and deserted Lloyds Banking Group and Royal Bank of Scotland as a result of their exposure to Ireland's crisis-wracked economy, the Independent reprots.

The tax-payer majority owned RBS, which owns Ulster Bank, fell 1.93p to 39.84p. Nearly 30% of RBS' Irish mortgages now represent 100% loan to value of the properties on which they were advanced.

Lloyds Banking Group shares finished down 2.79p at 63.93p. Barclays closed down 4.2p at 270p while HSBC lost 3.7p to 653.8p.

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FBI raids three US hedge funds in probe

The Federal Bureau of Investigation on Monday raided the offices of three hedge funds, according to people familiar with the matter, the FT reports.

The funds are Level Global Investors and Diamondback Capital Management, both based in Connecticut, and Loch Capital Management in Boston, those people said.

The raids come amid reports about a wide-ranging probe into potential insider trading on Wall Street.

Level and Diamondback were founded by former employees of SAC Capital Advisors, a private investment firm formed by Steven Cohen that ranks among Wall Street's largest hedge funds.

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Glencore eyes Drummond coal

Glencore, the world's largest commodities trader, and mining company Xstrata are leading the list of possible buyers for the Colombian coal assets of Drummond, a family-owned US coal mining company, the FT reports.

The mining interests - which include a railway and a port - could fetch $6bn-$8bn, people familiar with the discussions said. Second-round bids were due shortly, they added.

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Citigate founder David Wright to launch quoted marketing company

David Wright, the former chief executive of Incepta and founder of public relations firm Citigate, will today announce plans to build a new quoted marketing and communications group, the Telegraph reports.

The financial PR market had become "fragmented", according to Wright, who said there were "a lot of opportunities to consolidate the industry" globally.

Wright and his team will take over TSE Group, the Aim-listed sports marketing group, change the group's name to Porta Communications and launch a £2.75m placing to enable it to acquire talent and companies.

The former TSE Group will act as an investment vehicle for Wright to go on an acquisition spree.

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